Gift aid and digital giving consultation

A consultation for radical reform of gift aid rules has been launched by the Treasury and is open to Friday 20 September.

Gift aid, first introduced over 20 years ago, provided over £1billion additional funding to the sector last year. But up-take sits at around 80,000 charities, just 44 percent of the number of charities registered in England and Wales.

In recent months HMRC has introduced Charities Online, a soon-to-be compulsory gift aid claiming service that is supposed to modernise the process. But the system is under intense scrutiny as critics have highlighted numerous flaws and continue to feedback their concerns to HMRC. So far 12,000 charities have registered with the service, just 15 percent of those who claim, and at a feedback session with the sector last month.

The gift aid small donations scheme introduced in April aims to provide small charities with up to £1,250 of gift aid on small change donations, but it too has been burdened by criticism over its complexity.

The consultation advises that because gift aid is a tax relief it will always involve a certain amount of information passing between the donor, the charity and HMRC through the gift aid declaration, but suggests ways this can be adapted for spontaneous giving.

It outlines measures to give non-charitable intermediaries, including online fundraising platforms or retail outlets offering an added donation a greater role in operating gift aid.

It also proposes a single gift aid declaration per donor through a particular intermediary, removing the necessity for the donor to sign a declaration for each donation.

The consultation follows announcements in 2012’s Autumn statement and in 2013’s Budget that the government would look into ways to improve its current gift aid systems.

For further information including how to respond to the consultation visit